New Delhi: Stephen Broderick, chief executive officer of global marketing auditor Firm Decisions, is bullish about the Indian market. His company, responsible for ensuring transparency in the contracts between advertisers and advertising agencies, recently partnered with media and marketing advisory firm Spatial Access to enter India and is now planning to make India its third largest market.
Broderick was recently in India to evaluate the market and expand operations. Firm Decisions has more than 80 multinational companies as clients in its kitty and recorded revenue of more than $10 million dollars in the year ended March 2017. In an interview with Mint, Broderick talks about his expectations from the Indian market, global challenges and why digital is the worst medium in terms of return on investment. Edited excerpts:
How big is Firm Decisions globally?
We are a global marketing auditor. We work for media spenders and advertisers to deliver financial transparency in the contracts they enter in, with different advertising agencies. We have more than 80 clients, including Vodafone, Mondelez, Ikea, Reckitt Benckiser and Volkswagen.
In India, we have a joint venture with Spatial Access (a media and marketing advisory firm). Mumbai will be our 11th office around the world. We have done over 5,000 audits in 70 countries over the past 17 years.
What operations do you have in India?
We are just starting out in India but India will be our focus area for the next two years. Although we have been working here for five-six years, but predominantly, we have been working here on behalf of the global clients.
There are a couple of reasons behind entering India. First of all, India is the sixth-seventh largest media market in the world. Of the top 10 media markets in the world, this was the only country where we didn’t have an office till now. Second, Indian media market is almost the same as the rest of the world in terms of lack of transparency and side deals that are being done between the agencies and the vendors. Therefore, the benefits are not passed over to the advertisers/client.
What is the issue with agency-client contracts? How do you ensure transparency in these contracts?
Transparency comes down to having the right contract. For example, a lot of agency groups approach advertisers for buying digital media on a non-disclosure basis. What this means is that the agencies buy media from vendors and then they sell it at a price which they think is fair. These prices/markups are exorbitant. What we do is make these contracts transparent because these markups are high double-digit markups and hurt the advertisers.
And this is only happening in digital that advertisers are not allowed to oversee what the agencies are doing. This does not happen in television or print.
All of our employees are former finance directors from various ad agencies. We know where the bodies are buried because we buried them. We know what we did with our client’s money and that was very different from what they (clients) thought was being done. That’s how we know the tricks and ensure transparency.
Which are your best markets?
Our biggest market is Europe. If I look globally, Europe contributes 40% to our overall business, followed by America and Asia (25% each) and Latin America (10%).
I don’t believe there is any market that is purely transparent. That being said, there are some markets which try to be more transparent. France, for example, has a law which forbids agency deals that cannot be checked by the clients.
What potential do you see in the Indian market?
It’s still early but I believe that by the end of 2018, India will contribute 10% to our overall business. The idea is to make India the third-largest market in two years. Currently, we have 10-11 clients in India, all of which are global. We are very excited about India. I have met many clients here and it is very encouraging. Globally, television provides the best RoI (return on investment). Even big digital and e-commerce firms lose traffic when they stop advertising on TV. Digital is one of the worst mediums when it comes to RoI. However, there is a massive digital rush globally and in India as well. But India is far behind in terms of digital media spends. It’s growing. Digital is the big future of India.